SBA 504 Loans provide an affordable alternative in the commercial lending realm for business owners looking to purchase the property they operate out of and become the building owner.

A standard commercial loan usually requires 30% down which for a large building can be a six-figure down payment. Many small business owners can’t make that work.

Additionally, commercial loan rates are usually adjustable which creates an amount of uncertainty for the owner.

The SBA has a mandate to help create jobs in America. Part of that is helping business owners purchase their places of operation.

The SBA will lend up to 40% of the value of the property at a fixed low rate. The bank loans 50%, the SBA 40%, and the borrower brings 10%. That 10% can be financed meaning the seller could conceivably bring $0 to closing.

If you’re an agent, a broker, or a business owner looking to secure their place of business, this is a MUST watch!


00:00 SBA Loans – A great addition to your Real Estate Practice

02:40 What does SBA Financing Mean?

03:00 SBA Loan provides another commercial lending alternative

04:02 Standard commercial lending is hard for small business owners

04:26 SBA – When a business owner buys their building

04:41 SBA partners with local bank

05:27 How does it work?

05:44 The Buyer could do a $0 dollar closing!

07:00 Major Advantage = Drastic decrease in how much the Buyer needs to put down

07:43 2nd Advantage = Interest Rates

08:19 SBA Loans have fixed interest rates

09:18 Locally, BankNewport is an active SBA Lender

10:59 Where do you start?

13:23 A few caveats!

13:58 Higher Closing Costs: It’s 2 loans instead of 1

14:29 SBA Loans have Prepayment penalties

15:41 Eligible Passive Company requirement

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Sandi Warner, Esq. | Managing Broker | Team Lead

Harbor to Hill Real Estate Team | Warner Realty Group, LLC

358 Broadway, Newport, RI, 02840

Cell: 401-662-7204 | Office: 401-236-8685

[email protected]